Giorgio Armani, the luxury fashion and goods group, has announced a deal to build a chain of luxury hotels with the Dubai development firm, Emaar Properties.

Armani will take charge of design and styling, while Emaar will invest around $1bn (£538m) into the new franchise.

The deal will see the opening of ten luxury hotels and four resorts within seven years.

The hotels will be built on prime locations in the major cities of the world, including London, Paris, New York, Tokyo and Shanghai.

Emaar announced that hotels would also open in Dubai and Milan – to ‘acknowledge the heritage of the partnership companies’.

The first 250-room Armani Hotel will open in Dubai sometime next year and the 40,000sq m site will include a number of restaurants and a spa.

Giorgio Armani said: “we have been exploring the idea of bringing the Armani philosophy of design and style to hotels for many years.

“After very careful consideration, we have selected Emaar Properties to be our partner in this long term venture to develop a unique collection of luxury hotels and resorts around the world.”

Armani is the fourth major fashion group to venture into the hotel market, in a quest to secure a share in the expanding ‘luxury lifestyle’ sector.

The first ‘fashion hotel’ was the 277-room Palazzo Versace – designed by Donatella Versace and featuring a full Per Aquum spa – which opened on the Australian Gold Coast in 2000.

Bulgari, the Italian jeweller, signed a similar deal to Armani, with Marriott, the world’s largest hotel operator, in 2001. The first of its planned seven hotels – a 58-room hotel in a former nunnery in Milan – will open later this spring.

Salvatore Ferragamo, the Italian fashion designer, owns the 74-room Gallery Hotel Art in Florence.

Mohamed Ali Alabbar, chair of Emaar, said: “As a result of Giorgio Armani’s indelible imprint in the world of fashion, the name Armani is synonymous for modern elegance, style and above all, exceptional quality.

“We will open in the world’s most important cities and vacation destinations in the coming years,” he said.

The announcement also delivers a welcome boost for the leisure industry in the region, which has suffered from the war in Iraq, the outbreak of SARS, global recession and the fear of international terrorism. Details: www.emaar.com or www.giorgoarmani.com